News, ideas and a software CEO's thoughts from 25 years in the industry.

Software That Matters (Part 10)

5 years ago we first published a series of posts entitled “Software That Matters.” It was an ERP implementer’s point of view, culled from long experience, on why and how to purchase a business management software system. Later, we turned Software That Matters into a popular white paper that has since been viewed hundreds of times.

After five years, we thought it was time for an update, to reflect lessons learned since then. As it turns out, the vast majority of what we said then remains every bit as true today. Still, five years is a long time… so we decided to carefully retrace our steps, re-edit our paper, add some comments and present it as a series of blog posts that will carry us through November, 2015. We think that’s timely, as many companies at this time of year tend to reconsider the software they use to run their business — and how they might do better.

In our series we will again try to convey what’s important, what to measure, how to buy, what works, what it costs… and the many other business considerations required of this strategic investment,in what is probably the most important (and expensive) software a company will ever buy. In other words, the Software That Matters.

Today we offer post #10 in our series. Our full series beginshere. We hope you find it of value and welcome your feedback.

Key Indicators: Taking Action

Our own experience with deploying ERP solutions dovetails nicely with a web presentation given a few years ago now by Alexandre Attal, then an ERP executive from one of Sage Software’s many ERP divisions. The topic was “How ERP Can Translate Information into Business Success” and Attal was addressing the area of performance indicators and business intelligence.

In other words, in gaining all this information from a modern business management system… What’s important here, what do I do with it, and how do I manage this data? Some key takeaways…

You have four key questions to ask yourself:

Do you have the right data to make the best decisions?

How confident are you in the accuracy of data?

Do different departments have conflicting data?

How up to date is your information?

Each company has to work through these questions as they plan and then execute their ERP deployment, until executives feel confident that the answers are, for the most part: Yes; Very; No; and Current.

In the last analysis, we are looking for the Key Performance Indicators that will lead to improved measurement (or benchmarking) and then improved performance.

We start with: What are we measuring? This is the DEFINITION phase. Here it is important not to get bogged down in details. Don’t use metrics made to make you look good – the goal is improvement. Take a customer-centric point of view. What’s important to them? Track that. And finally, take a look at new ways to measure.

Next: What data should we use? This is the COLLECTION phase. The data should be in a centralized repository. The information you track and analyze – and upon which you will base your final judgments about where to act – should be based on information derived from data entry that is easy to enter in order to ensure the most reliable results.

Then: What are we looking at? This is the EVALUATION phase. Don’t get bogged down arguing results. Analysis requires understanding of the definition of the various Key Performance Indicators – make them clearly defined and easy to use, so you can focus on action.

And finally: What do we do now? This is the ACTION phase. Remember, the goal is action – information alone will not improve performance. This requires continuous measuring.

We’ll look next at some conclusions from this line of thinking, notably, what your business management system then should provide. Stay tuned…